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Canadian dollar pressures Prairie wheat bids

The loonie rose roughly half a cent over the course of the week

Hard red spring wheat bids in Western Canada dipped during the week ended Oct. 13, as the Canadian dollar rose due to higher oil prices.

Depending on the location, average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were down as much as $3-$4 per tonne across the Prairie provinces, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $222 per tonne in western Manitoba to as high as $245 in southern Alberta.

Quoted basis levels varied from location to location, but generally held steady to range from about $4 below the futures to $19 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between U.S. dollar-denominated futures and Canadian dollar cash bids.

When accounting for currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$178 to US$196 per tonne, which was up on a U.S. dollar basis on the week. That would put the currency-adjusted basis levels at about US$30-$48 below the futures.

Looking at it the other way around, if the Minneapolis futures are converted to Canadian dollars, CWRS basis levels across Western Canada range from $37 to $60 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were down by about $1 per tonne, except in the northern Alberta and southern Alberta regions where they rose $1.50-$3 per tonne. Prices across the Prairies ranged from $163 to $184 per tonne.

Average durum prices stayed steady, with bids in southern Alberta, Saskatchewan and western Manitoba coming in at about $260-$268 per tonne.

The December spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$6.15 per bushel on Oct. 13, down 8.75 U.S. cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The December K.C. wheat contract was quoted Oct. 13 at US$4.3625 per bushel, down half a U.S. cent compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled at US$4.395 on Oct. 13, down by four U.S. cents on the week.

The Canadian dollar settled Oct. 13 at 80.08 U.S. cents, up roughly half a cent on the week.

About the author

CNSC

Ashley Robinson writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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